If considered necessary by the supervisor and with appropriate campus approvals, USNH departments may pay a new employee a reasonable transition allowance to cover their personal moving, relocation and employment transition costs. If a transition allowance is paid, the allowance will be taxable to the employee and paid via Payroll. The allowance must be (1) authorized in advance, (2) documented in writing to the employee and for USNH files, and (3) directly related to the commencement of employment at USNH.
Effective January 1, 2018, reimbursement of actual qualified moving expenses incurred is required to be included in the gross income of the employee receiving these payments. Consequently, USNH shall neither reimburse an employee, nor pay vendors directly for these expenses. This includes: moving company expenses, temporary storage or housing, travel, meals or other personal or family relocation expenses. All relocation and related payments must be paid as a transition allowance directly to the employee. The transition allowance is the total amount authorized to be paid for the employee's transition costs.
The transition allowance does not apply to special situations involving the establishment or relocation of professional labs, libraries, supplies and equipment of faculty and researchers. These latter payments, if any, will be paid directly to vendors through normal purchasing and accounts payable procedures.
C. EMPLOYMENT NEGOTIATIONS AND PRE-APPROVAL
The transition allowance, if any, is determined for each prospective employee on a case-by-case basis. USNH Policy UNH V.F.7.3.3 specifically allows "compensation paid to faculty or exempt staff members as part of a recruiting effort..." While there is no standard or maximum USNH transition allowance, employment negotiations should result in a reasonable amount necessary to recruit the employee to USNH giving due consideration to USNH budgetary and funding constraints. All agreements which include the payment of a transition allowance must be in writing and be pre-approved by the President, Vice President or Dean. Any offer of a transition allowance for an Executive Officer requires approval of the USNH Board of Trustees' Executive Committee.
Allowances in excess of 10% of an employee's regular starting salary require the approval of the campus President. Each campus may set a limit on the maximum transition allowance that is more restrictive than this policy. In addition, a campus may consider the transition allowance earned ratably over the first six months of employment and therefore may require repayment upon termination before 6 months of employment. The hiring department is responsible for securing, in advance, the funding source(s) to support the authorized payment and the related applicable USNH fringe benefit charge thereon.
D. TIMING OF PAYMENT
The transition allowance will generally be paid within the first month after the employee has begun employment. The department, however, can choose to defer payment up to one year after employment. In rare exceptions, and with written approval by the President, Vice President or Dean, all or a portion of the transition allowance may be advanced to the employee prior to commencement of employment. All employees receiving a transition allowance in advance of the first day physically on the job will be required to sign a promissory note payable to USNH. In the event the employee does not commence employment, the campus will pursue formal collection efforts and the hiring department will be responsible for funding the full amount of the advance including fringe benefit charges thereon if the advance is not repaid.
E. PROCESSING THROUGH PAYROLL
The transition allowance is paid through the Payroll system as taxable additional pay, following normal Payroll procedures.
F. REQUIRED COMMUNICATION WITH EMPLOYEE
The hiring department is responsible for communicating information regarding payment and taxability of the allowance to the employee. To accomplish this, the following paragraph should be included in the employment agreement or offer letter.
A comprehensive transition allowance in the amount of $____________ will be paid in lieu of moving, relocation and employment transition cost reimbursement and/or payment. The allowance will be paid to you during your first month of employment. It will be processed as additional taxable compensation through the Payroll system with all applicable income taxes and FICA amounts deducted.
G. EFFECTIVE DATE
This policy is effective for all negotiations with prospective employees initiated or settled after December 31, 2017.
H. ADDITIONAL GUIDANCE FOR UNIVERSITY OF NEW HAMPSHIRE SPONSORED PROGRAMS
Payments to vendors to relocate professional labs are allowable direct charges to sponsored programs.
1. Criteria for charging employee transitional allowances to sponsored programs:
a. Must be "reasonable" and justified with written documentation prepared and maintained by the hiring department, based on comparable industry or survey data for each individual receiving an employee transition allowance;
b. Must be "allocable" for proportional benefit, according to the terms of the employee's appointment. If appointment is 50% research and 50% teaching, the sponsored program can be charged no more than 50% of the total employee transition allowance;
c. Must be "consistently applied" such that the average transition allowance charged to federal funds is not materially and substantially higher than the allowances charged to other UNH funds;
d. The amount of each employee transition allowance must adhere to the pertinent sponsor rules and regulations, and to specific OMB circulars when federal funds are involved.
2. Pre-Approval requirements
a. Prior approval by UNH Sponsored Programs Administration (SPA) is required for employee transition allowances, as with all other forms of additional pay when charges are proposed for UNH sponsored programs. (See UNH V.F.22.214.171.124.6.2).
b. Prior to the President's and SPA's approvals, when an allowance is proposed to exceed 10% of the new employee's regular starting salary, approval by the VP for Research and Public Services is required when UNH sponsored programs funds will be charged.
3. Timing of Payment
If sponsored programs funds are paid to an employee who does not commence employment or the advance is not fully repaid on a timely basis, the charges must be moved to an unrestricted funding source.
a. Uniform Guidance § 200.463 Federal requirements related to recruiting costs
b. National Science Foundation's Grants Policy Manual, section 642, Relocation Costs